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SINKING  FUND  AND  GUARANTY  AGREEMENT 


AMERICAN  SMELTING  AND  REFINING  COMPANY 


TO 


GUARANTY  TRUST  COMPANY  OF  NEW  YORK,  as  Trustee 

AND 

ROSITA  COAL  AND  COKE  COMPANY 


NOVEMBER  1,  1919 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/sinkingfundguaraOOamer 


THIS  AGREEMENT,  made  and  entered  into  the  1st 
day  of  November,  1919,  by  and  between  the  American 
Smelting  and  Refining  Company,  a corporation  of  the 
State  of  New  Jersey,  of  the  first  part  (herein  referred  to 
as  the  “Smelting  Company”),  the  Guaranty  Trust  Com- 
pany of  New  York,  a corporation  of  the  State  of  New 
York,  of  the  second  part  (herein  referred  to  as  the  “Trus- 
tee”), and  the  Rosita  Coal  and  Coke  Company,  a corpora- 
tion of  the  State  of  Delaware,  of  the  third  part  (herein 
referred  to  as  the  “Company”),  Witnesseth: 

Whereas,  the  Company  contemporaneously  herewith 
has  executed  and  delivered  to  the  Trustee  a trust  agree- 
ment dated  November  1,  1919,  pledging  the  capital  stock 
therein  described  of  the  Compagnia  Carbonifera  de  Sabinas, 
a corporation  organized  and  existing  under  the  laws  of  the 
Republic  of  Mexico  (herein  referred  to  as  the  “Sabinas 
Company”),  to  secure  an  issue  of  bonds  of  an  aggregate 
principal  sum  of  not  exceeding  One  million  three  hundred 
and  twenty-five  thousand  dollars  ($1,325,000),  which  bonds 
are  to  be  known  as  the  Company’s  Five-Year  6%  Sinking- 
Fund  Gold  Bonds,  are  to  be  dated  November  1,  1919,  to 
mature  November  1,  1924,  and  to  bear  interest  at  the  rate 
of  six  per  cent,  per  annum,  payable  semi-annually  on  May 
1 and  November  1 in  each  year  until  the  principal  sum  is 
fully  paid,  both  principal  and  interest  being  payable  at 
the  principal  office  of  the  Guaranty  Trust  Company  of  New 
York  in  the  City  of  New  York,  reference  to  said  trust 
agreement  being  hereby  specifically  made  for  the  exact 
terms  thereof;  and 

Whereas,  by  the  provisions  of  the  said  trust  agreement, 
the  Company  has  agreed  to  make  sinking-fund  payments 
in  the  amount  of  at  least  Two  hundred  and  sixty-five  thou- 
sand dollars  ($265,000  ) per  annum,  payable  to  the  Trustee 
in  semi-annual  instalments  of  One  hundred  and  thirty-two 
thousand  five  hundred  dollars  ($132,500)  on  or  before  the 
last  days  of  April  and  October  in  each  year,  commencing 
with  the  last  day  of  April,  1920,  such  sinking-fund  moneys 


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to  be  applied  by  the  Trustee  to  the  purchase  or  redemption 
of  bonds  at  a price  not  exceeding  the  principal  amount 
thereof;  and 

Whereas,  the  Smelting  Company  is  about  to  acquire 
said  bonds,  or  substantially  all  thereof,  from  the  Company 
in  part  payment  of  the  transfer  and  delivery  to  the  Com- 
pany of  said  stock  of  the  Sabinas  Company ; and 

Whereas,  the  Smelting  Company,  in  order  to  acquire 
said  stock  of  the  Sabinas  Company,  has  agreed  to  sell, 
transfer  and  deliver  in  part  payment  therefor  said  bonds 
of  the  Company  and  to  guarantee  the  due  and  punctual 
payment  by  the  Company  of  the  principal  and  interest  of 
said  bonds  and  of  the  sinking-fund  payments  required  to 
be  made  by  the  Company  under  the  terms  of  said  trust 
agreement;  and 

Whereas,  the  Company  is  a subsidiary  of  the  Smelt- 
ing Company  which  owns  all  of  the  capital  stock  of  the 
Company ; and 

Whereas,  it  is  within  the  powers  of  the  Smelting  Com- 
pany legally  to  make  the  covenants  herein  contained  and 
to  guarantee  the  due  payment  of  the  bonds,  principal  and 
interest;  and 

Whereas,  all  things  necessary  to  make  this  instrument 
a valid  binding  legal  obligation  of  the  parties  hereto  have 
been  done,  performed  and  have  happened; 

Now,  THEREFORE,  THIS  AGREEMENT  WITNESSETH  *. 

That  for  and  in  consideration  of  the  premises  and  the 
reciprocal  covenants  herein  contained,  and  the  sum  of  One 
dollar  to  each  of  the  parties  by  the  other  in  hand  paid, 
receipt  whereof  is  hereby  acknowledged,  and  of  the  execu- 
tion of  the  trust  agreement  herein  referred  to  and  of  the 
acceptance  of  the  said  bonds  by  the  holders  thereof,  the 
parties  hereto  agree  as  follows : 


First.  The  Company  agrees  to  set  aside  all  dividends 
or  other  payments  received  by  it  upon  the  stock  of  the 
iSabinas  Company  as  a special  fund  and  duly  to  apply  the 
same,  all  as  provided  in  and  by  Section  12  of  Article  II  of 
the  said  Trust  Agreement.  In  case  the  funds  in  the  hands 
of  the  Trustee,  derived  directly  or  through  the  Company 
from  payments  received  by  way  of  dividends  or  otherwise 
upon  the  stock  of  the  Sabinas  Company,  shall  be  insuffi- 
cient to  provide  payment  of  such  principal  and  interest 
and/or  sinking  fund  instalments  for  any  reason  whatso- 
ever, the  Company  wdll  deposit  with  the  Trustee  at  least 
one  day  before  the  due  date  of  any  such  payments,  such 
sums  as  added  to  the  amount  in  the  Trustee’s  hands  and 
available  for  the  purpose  of  such  payments,  shall  be  suffi- 
cient to  satisfy  the  same. 

Second.  The  Smelting  Company  hereby  agrees  to  guar- 
antee and  does  hereby  guarantee  the  due  and  punctual 
payment  by  the  Company  of  the  principal  of  and  interest 
on  each  and  every  of  said  bonds  as  and  when  the  same 
shall  respectively  become  due  and  payable,  whether  at 
maturity  or  by  declaration  or  otherwise,  pursuant  to  the 
provisions  of  said  bonds  and  coupons  and  of  the  Trust 
Agreement,  and  further  guarantees  the  due  and  punctual 
payment  by  the  Company  of  the  sinking  fund  payments 
required  to  be  made  by  the  Company  in  accordance  with 
the  terms  of  said  Trust  Agreement;  and  hereby  agrees 
itself  punctually  to  make  such  payments  £or  principal  and 
interest  and  sinking  fund  if  the  Company  shall  fail  to 
make  the  same  when  due. 

Third.  The  Smelting  Company  covenants  with  the 
holder  of  each  bond  that  the  principal  thereof  and  interest 
thereon,  and  the  sinking-fund  payments  provided  for  in 
said  Trust  Agreement  shall  be  duly  and  punctually  paid 
as  and  when  the  same  shall  respectively  become  due  and 
payable,  and  that  it  will  execute  upon  each  bond  a cove- 
nant to  that  effect  in  the  following  words : 

“For  value  received,  the  American  Smelting  and 
Kefining  Company  hereby  guarantees  to  the  holder 


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hereof  the  due  payment  by  Rosita  Coal  and  Coke 
Company  of  principal,  interest  and  sinking-fund  in 
accordance  with  the  terms  of  the  within  bond. 

American  Smelting  and  Refining  Company, 

By ” 

Fourth.  Neither  the  guarantee  hereinbefore  recited 
nor  the  guarantee  endorsed  upon  any  of  said  bonds  shall 
be  deemed  to  be  waived,  discharged  or  affected  by  any  ex- 
tension which  any  bondholder  or  the  Trustee  under  said 
Trust  Agreement  may  give  to  the  Company,  or  by  any 
action  or  inaction  of  the  Trustee  or  of  the  Company,  or  of 
any  bondholder,  or  by  any  merger  or  consolidation  of  the 
Company  with  or  without  the  transfer  of  its  property  to 
any  other  company,  or  in  any  other  way  except  by  the 
payment  in  full  of  said  bonds,  principal  and  interest ; and 
the  Smelting  Company  hereby  waives  presentation  of  said 
bonds  or  demand  and  notice  of  protest  or  of  non-payment. 

Fifth.  In  the  event  of  any  default  by  the  Company  in 
the  performance  of  its  covenants  and  obligations  under  the 
terms  of  said  Trust  Agreement,  a sale  of  the  trust  estate 
shall  in  no  way  affect  the  obligation  of  the  Smelting  Com- 
pany to  cause  the  due  payments  of  principal  and  interest 
of  said  bonds  to  be  paid,  and  the  Smelting  Company  shall 
make  good  any  deficiency  remaining  after  such  sale.  The 
Trustee  shall  be  under  no  obligation  to  resort  first  to  the 
pledged  stock,  but  may  in  the  first  instance  at  its  option 
call  upon  the  Smelting  Company  to  make  good  any  default 
of  the  Company. 

Sixth.  The  Company  agrees  to  repay  to  the  Smelting 
Company  on  the  1st  day  of  January,  1925,  with  interest 
accruing  meanwhile  at  the  rate  of  6%  per  annum,  any 
money  which,  in  accordance  with  the  provisions  hereof, 
the  Smelting  Company  shall  have  paid,  together  with  such 
accrued  interest,  and  such  indebtedness  at  the  request  of 
the  Smelting  Company  shall  be  evidenced  by  promissory 


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notes  or  other  evidences  of  indebtedness  maturing  on  said 
date,  and  if  the  Smelting  Company  holding  the  same  or 
entitled  so  to  do  shall  so  require,  shall  secure  said  promis- 
sory notes  or  other  evidences  of  indebtedness  by  a trust 
agreement  similar  to  the  Trust  Agreement  hereinbefore 
referred  to,  but  second  in  lien  thereto,  but  the  Company 
shall  not  have  the  privilege  of  anticipating  the  payment 
of  said  notes  or  other  evidences  of  indebtedness  by  paying 
the  whole  or  any  part  of  them  at  any  time  before  their 
maturity  until  the  Five-Year  6%  Sinking  Fund  Gold  Bonds 
have  been  paid,  principal  and  interest.  Such  notes  or 
other  evidences  of  indebtedness,  which  may  be  given  to 
the  Smelting  Company  evidencing  the  indebtedness  in- 
curred by  the  Company  for  advances  made  by  the  Smelting 
Company  in  accordance  with  the  terms  of  this  agreement, 
shall  be  subordinate  to  the  payment  of  the  Five-Year  6% 
Sinking  Fund  Gold  Bonds. 

Seventh.  The  Smelting  Company  further  agrees  that, 
so  long  as  any  of  the  Five-Year  Six  Per  Cent.  Sinking  Fund 
Gold  Bonds  of  the  Company  are  outstanding,  it  will  not 
sell,  assign,  transfer,  dispose  of  or  part  with  the  control 
of,  any  indebtedness,  obligations  or  liabilities,  now  or  here- 
after existing,  of  the  Company  or  the  Sabinas  Company 
to  it,  except  by  extension  or  renewal  thereof,  and  that  the 
payment  of  all  such  indebtedness,  obligations  or  liabilities 
shall  be  subject  and  subordinate  to  the  payment  in  full  of 
all  of  said  bonds  for  principal  and  interest  and  to  the  mak- 
ing of  all  such  sinking  fund  payments.  Provided,  however, 
that  nothing  contained  in  this  or  in  the  next  preceding 
article  of  this  agreement  shall  be  taken  or  held  to  preclude 
the  Smelting  Company  from  exercising  and  enforcing,  in 
any  lawful  manner  and  to  any  lawful  extent,  in  the  courts 
of  Mexico  or  elsewhere,  its  rights  and  powers  as  a creditor 
of  the  Sabinas  Company,  if  and  whenever,  in  the  judgment 
of  the  Smelting  Company,  concurred  in  by  the  Trustee,  it 
shall  be  necessary  or  desirable  to  exercise  or  enforce  such 


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rights  or  powers  in  order  to  protect  the  Sabinas  Company 
in  the  beneficial  ownership  of  its  mining  properties  and  to 
prevent  or  hinder  persons  claiming  rights  or  interests  in 
such  properties  adverse  to  the  rights  or  interests  therein  of 
the  Sabinas  Company  from  establishing  such  claims;  and 
the  Smelting  Company  agrees,  until  the  said  bonds  are 
fully  paid,  both  as  to  principal  and  interest,  that  any 
rights,  powers  or  interests  which  it  may  now  have  or  may 
hereafter  acquire  as  such  creditor  in  respect  to  such  prop- 
erties, shall  fie  used,  held  or  availed  of  by  it,  so  far  as 
possible,  in  trust  for  the  benefit  of  the  bondholders  under 
said  Trust  Agreement  and  the  Company.  The  Trustee 
may  accept  a certified  copy  of  a resolution  of  the  Board  of 
Directors  or  Executive  Committee  of  the  Smelting  Com- 
pany as  to  the  propriety  of  its  giving  its  consent. 

Eighth.  The  remedies  herein  provided  for  are  cumula- 
tive and  in  addition  to  any  other  remedies  existing  at  law 
or  in  equity. 

Ninth.  Any  notice  or  letter  herein  provided  for  may 
be  given  by  mailing  the  same  to  the  party  to  whom  it  is 
required  to  be  sent  at  its  last  known  address  or  at  such 
other  address  as  it  may  from  time  to  time  file  with  the 
Trustee  in  writing. 

Tenth.  The  recitals  of  fact  herein  contained  are  made 
by  the  Company  and  not  by  the  Trustee  which  assumes  no 
responsibility  in  respect  thereto.  The  Trustee  is  joined  as 
a party  to  this  Agreement  for  the  purpose  of  securing  the 
benefits  thereof  to  the  holders  of  said  Five-Year  6%  Sink- 
ing Fund  Gold  Bonds  and  for  the  further  security  of  said 
Bonds.  It  is  agreed  that  the  provisions  of  said  Trust  Agree- 
ment and  in  particular  the  provisions  of  Article  X thereof 
in  respect  to  the  rights  and  duties  of  the  Trustee  there- 
under shall  be  taken  to  be  and  hereby  are  made  a part  of 
this  Agreement  in  respect  to  the  rights  and  duties  of  the 
Trustee  hereunder. 

In  witness  whereof  the  parties  hereto  have  caused 
these  presents  to  be  executed  by  their  respective  officers 


thereunto  duly  authorized,  and  their  corporate  seals  to  be 
hereunto  affixed  and  attested,  in  triplicate,  this  day  and 
year  first  above  written. 


American  Smelting  and  Refining  Company, 


( Corporate  Seal ) . 


By  Karl  Eilers 

Vice-President. 


Attest : 

W.  E.  Merriss 

Secretary. 


Guaranty  Trust  Company  of  New  York, 


(Corporate  Seal). 


By  M.  P.  Callaway 

Vice-President. 


Attest : 

E.  P.  Davis 

Assistant  Secretary. 


Rosita  Coal  and  Coke  Company, 


(Corporate  Seal). 


By  G.  P.  Bartholomew 

President, 


Attest : 

W.  E.  Merriss 

Secretary. 


State  of  New  York,  | 

County  of  New  York,  $ss'  ‘ 

On  the  7th  day  of  November,  1919,  before  me  came 
Karl  Eilers,  to  me  known,  who,  being  by  me  duly  sworn, 
did  depose  and  say  that  he  resides  in  Sea  Cliff,  L.  I., 
N.  Y. ; that  he  is  a Vice-President  of  American  Smelting 
and  Refining  Company,  one  of  the  corporations  described 
in  and  which  executed  the  foregoing  instrument  ; that  he 
knows  the  seal  of  said  corporation;  that  the  seal  affixed 
to  said  instrument  is  such  corporate  seal;  that  it  was  so 
affixed  by  order  of  the  board  of  directors  of  said  corpora- 
tion; and  that  he  signed  his  name  thereto  by  like  order. 

Christopher  J.  Acer 

(Seal)  Notary  Public,  Kings  County  No,  122 

Certificate  filed  in  N.  Y.  County.  No.  107 
N.  Y.  Co.  Registers  No.  1200. 


State  of  New  York,  1 
County  of  New  York,  ‘ 

On  the  7th  day  of  November,  1919,  before  me  came 
M.  P.  Callaway,  to  me  known,  who,  being  by  me  duly 
sworn,  did  depose  and  say  that  he  resides  in  New  York 
City,  N.  Y. ; that  he  is  a Vice-President  of  Guaranty  Trust 
Company  of  New  York,  one  of  the  corporations  described 
in,  and  which  executed  the  foregoing  instrument  ; that  he 
knows  the  seal  of  said  corporation;  that  the  seal  affixed 
to  said  instrument  is  such  corporate  seal;  that  it  was  so 
affixed  by  order  of  the  board  of  directors  of  said  corpora- 
tion ; and  that  he  signed  his  name  thereto  by  like  order. 

Arthur  Burke 

(Seal)  Notary  Public.  New  York  County 

New  York  County  Clerk’s  No.  356 
New  York  Register’s  No.  10024 
My  commission  expires  Mar.  30,  1920 


9 


State  of  New  York,  ) 

7 '•CJO  • 

County  of  New  York,  * 

On  the  7th  day  of  November,  1919,  before  me  came 
G.  P.  Bartholomew,  to  me  known,  who,  being  by  me  duly 
sworn,  did  depose  and  say  that  he  resides  in  Essex  Fells, 
N.  J.,  that  he  is  the  President  of  Rosita  Coal  and  Coke 
Company,  one  of  the  corporations  described  in  and  which 
executed  the  foregoing  instrument ; that  he  knows  the  seal 
of  said  corporation;  that  the  seal  affixed  to  said  instru- 
ment is  such  corporate  seal ; that  it  was  so  affixed  by  order 
of  the  board  of  directors  of  said  corporation;  and  that  he 
signed  his  name  thereto  by  like  order. 

Christopher  J.  Acer 

(Seal)  Notary  Public,  Kings  County  No.  122 

Certificate  filed  in  N.  Y.  County  No.  107 
N Y Co.  Registers  No.  1200 


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